Former Hansen patients seeking tens of millions of dollars

Lawsuits have piled up against Powell Valley Healthcare over allegations of repeated malpractice by a former surgeon — and contentions that the hospital should have been quicker to part ways with him.

Between August 2014 and this past March, 20 former patients have filed medical malpractice lawsuits over treatment they received from Dr. Jeffrey Hansen. They’re seeking a combined total of more than $70 million in damages.

The patients allege they received substandard medical care from Hansen and claim Powell Valley Healthcare was too slow to suspend the doctor and negligent in giving him medical credentials.

Two other patients filed malpractice suits in 2012 and 2013 and settled their claims against Hansen and Powell Valley Healthcare last year; those patients each received confidential payments.

Filings and sworn testimony in the cases allege Powell Valley Healthcare leaders received multiple complaints from patients and staff about Hansen over the years — including that he had a higher rate of surgical complications and infections among his patients and that he performed surgeries outside his expertise.

In court filings, Hansen and the hospital have denied any wrongdoing or negligence.

Hansen was Powell Valley Healthcare’s most prolific surgeon until being suspended in November 2013 over “patient safety concerns.” He resigned a few months later.

None of the malpractice lawsuits are close to going to trial, and court records indicate settlement discussions have generally been at an impasse. The three insurance companies who provided liability insurance to the hospital between August 2012 and August 2015 have been fighting with each other and Powell Valley Healthcare about who’s on the hook for the patients’ claims.

Homeland Insurance Company (a part of the OneBeacon Insurance Group) provided liability insurance to the hospital between Aug. 1, 2013 and Aug. 1, 2014. However, the company has asked a U.S. District Court Judge to rule it has no duty to defend Powell Valley Healthcare for the complaints about Hansen that arose during that time period. Homeland’s main argument is that the concerns about Hansen’s care were brought to Powell Valley Healthcare’s attention before their coverage took effect.

When Homeland first indicated it was going to refuse to cover the patient complaints filed during its year of coverage, PVHC attorney Tracy Copenhaver called the insurer’s position “absolutely absurd and in bad faith.”

“(Homeland Insurance representatives) are, I believe, trying to place PVHC in an extremely poor financial position,” Copenhaver wrote in an October 2014 letter. “PVHC does not have sufficient funds to defend these claims, negotiate settlements nor pay damages, and yet that seems to be the position this wealth insurance company wants to put PVHC in.”

Second insurance company refuses coverage of claims

Utah Medical Insurance Association (UMIA) provided liability insurance to Powell Valley Healthcare between Aug. 1, 2014, and Aug. 1, 2015, and it’s also refusing to provide any coverage of claims related to Hansen. The company has asked the same federal judge to rescind its liability coverage.

UMIA says in part that Powell Valley Healthcare knew about “the extensive problems with the practices of Dr. Hansen” and failed to tell the insurer about the potential claims arising from Hansen’s care.

“Had UMIA known of the material information, it would not have issued the UMIA Policy,” the company wrote in one filing.

PVHC denies those allegations, saying in part that they “provided full disclosure as to any potential risks it was aware of.”

Further, PVHC says UMIA is obligated to fulfill the policy it sold to the organization.

Of the 22 patients who’ve filed lawsuits in recent years, 17 have been represented by attorneys with the Spence Law Firm of Jackson, often in conjunction with Simpson, Kepler and Edwards in Cody.

In nearly all of the cases brought by those attorneys, the patients have also sought to recover damages from HealthTech Management Services, which employs a chief executive officer to manage Powell Valley Healthcare operations.

Those attorneys say former Powell Valley Healthcare CEO Bill Patten, a HealthTech employee, could have — and should have — fired Hansen.

HealthTech has asked to be dismissed from the lawsuits. It has argued its contract with PVHC specifically says the management company has no authority over matters of medical judgment such as credentialing.

The management company asked the Wyoming Supreme Court to step in and settle the issue, but the court declined to do so in December. The high court said it wasn’t clear that the question could be fully resolved at that time.